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Western Price Survey / Archives

March 31, 2000
Market Influenced by Future Concerns

Power traders wrapped up their business for March early this week but altering trading patterns to close out monthly books by Wednesday. By midweek, traders were already looking ahead to April-seeing a huge list of generation repair outages, high natural gas prices. In other words, more of the same things experienced this past month.

Instead of prices in the low-20's for peak power and single-digit excess energy, California buyers were forced into premium markets this week. One Southern California utility scheduler, suffering from an unexpected generation outage and closed off from usual markets by transmission curtailments at Sylmar, Mead and McCoullogh, cringed as he paid well over 34 mills/KWh for replacement energy. Prices in the Southwest were not far behind at 33.5 mills/KWh at Four Corners and 34 mills/KWh at Palo Verde.

Even the California/Oregon Border remained pricey at 32 mills to 34.5 mills/KWh even though the California Power Exchange clearing price collapsed from its 35.4 mills pinnacle set Wednesday to 31.7 mills/KWh for Friday deliveries.

The Cal-PX off-peak price rose to 27.7 midweek but fell hard to 21.6 mills/KWh.

Pacific Northwest price signals were highly mixed. Mid-Columbia began the week at as high as 30 mills, but slipped to the 27.75 mills to 28.5 mills range. Off-peak, however, climbed at stayed at 26 mills/KWh.

Bonneville Power Administration, capitalizing on the relative premiums in California set flat prices across all hours at 31 mills peak in the Northwest and 32 mills/KWh to COB/NOB-or even higher if the PX rose above that mark.

While BPA reduced surplus power prices for Sunday, it reset the benchmark at 31 mills and 32 mills for Monday.

A wide variety of resource problems beset the market this week, including unplanned outages at Grand Coulee Dam, which dropped 635 MW at Unit No. 23 on Wednesday afternoon and a very brief trip of 410 MW at Hells Canyon hydro plants in Idaho. Loss of a 500 KV transmission line out of John Day in Oregon impacted the system al the way down to the Sylmar terminus of the DC Intertie.

The California/Oregon Intertie remained at limited capacity, but it was a variable curtailment along Path 15 that had traders jumping and zonal price disparities blooming.

Beginning next week, as much as 2,500 MW of Southwest generation is set for spring maintenance, including Unit No. 3 at Palo Verde. In compensation, a large Intermountain Power unit is expected to begin restart after five week layoff.

Northwest water managers are preparing for annual "fish-flush" to prevent salmon fry emerging from gravel beds from getting stuck as river levels decline.

The first step is to try to minimize fluctuations from reservoir releases on the Mid-Columbia at Hanford Reach, where utilities have begun actions to ensure minimum flows. Weekly discharges from grand Coulee dam will gradually increase, within flood control requirements and hydro operating constraints. beginning April 10, special requirements will kick in to maintain stead flows at Priest Rapids to accommodate fish spills at the dam [Arthur O'Donnell].

Gas Goes Up a Dime, Down a Dime

Natural gas prices were also at unusually high levels this week, particularly in the face of modest utility electric demand. But because of generation load in Southern California caused by the absence of hydropower flows from the Northwest, prices at the SoCal Border topped $3.03/MMBtu before easing this week to $2.96/MMBtu.

Similarly, Alberta hub prices screamed above $(c)3.70/Giajoule midweek before settling to $3.59/Gj. In Alberta, the falloff was attributed to overpacking pipelines from the producing fields as traders decided to inject storage earlier than the usual April 1 season start date. Without a big demand for fuel this week, that caused a congested system and Nova installed a harsh operational tolerance band in which no one was allowed to leave extra gas in the pipes.

Some were surprised at the high volume of injection, some 7 Bcf put into Western storage this week, but they expect it may find a use soon.

Next week there will begin some serious flow restrictions out of the Transwestern system, which will cut its 900 MMcfd pipeline capacity to about half. Downstream form Transwestern, Pacific Gas & Electric's pipes will drop to zero, taking some 250 MMcfd of the delivery system. "The border will be short" next week, one marketer predicted.

At many hubs, the price volatility mirrored that of the NYMEX screen which moved up $0.10/MMBtu on Wednesday, but then gave it back on Thursday.

The quick price changes left money in the pipes for transporters. "The movers are making money," one buyer said [A. O'D.].

Western Electricity Prices
Week of March 27-31, 2000
Hub Peak (heavy) Off-peak (light)
Alberta Pool (C$) 28-48 24-41-6
California PX (WAC) 31.7-35.4 21.6-27.7
Mid-Columbia 27.75-30 25-26
COB 31.5-34.5 25-26
Palo Verde 32-34 18-20

Archives of the Western Price Survey for the past year are also available online.


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